What is SAE.DE's Intrinsic value?

Shop Apotheke Europe NV (SAE.DE) Intrinsic Value Analysis

Executive Summary

As of July 16, 2025, Shop Apotheke Europe NV's estimated intrinsic value ranges from $85.16 to $164.77 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $164.77 +54.3%
Discounted Cash Flow (5Y) $99.28 -7.0%
Dividend Discount Model (Multi-Stage) $85.16 -20.3%

Is Shop Apotheke Europe NV (SAE.DE) undervalued or overvalued?

With the current market price at $106.80, the stock appears to be moderately undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Shop Apotheke Europe NV's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 2.6% 3.1%
Equity market risk premium 5.5% 6.5%
Adjusted beta 0.53 0.61
Cost of equity 5.5% 7.6%
Cost of debt 7.0% 9.9%
Tax rate 5.2% 5.8%
Debt/Equity ratio 0.11 0.11
After-tax WACC 5.6% 7.7%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 6.7% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $1,204 (FY12-2022) to $1,644 (FY12-2032)
  • Net profit margin expansion from -6% to 12%
  • Capital expenditures maintained at approximately 3% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $99 $2,132M 90.3%
10-Year Growth $165 $3,455M 78.8%
5-Year EBITDA $31 $745M 72.4%
10-Year EBITDA $63 $1,404M 47.9%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 6.5%
  • Long-term growth rate: 3.0%
  • Fair value: $85.16 (-20.3% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 7.6% (Low) to 5.5% (High)
  • Long-term growth rate: 2.0% (Low) to 4.0% (High)
  • Fair value range: $(48) to $(234)
  • Selected fair value: $-141.19 (-232.2% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $2158M
Enterprise Value $2284M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 5.30
Current Dividend Yield 62.96%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.11

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 40% $49.43
Discounted Cash Flow (5Y) 33% $24.82
Dividend Discount Model (Multi-Stage) 27% $17.03
Weighted Average 100% $121.71

Investment Conclusion

Based on our comprehensive valuation analysis, Shop Apotheke Europe NV's intrinsic value is $121.71, which is approximately 14.0% above the current market price of $106.80.

Key investment considerations:

  • Strong projected earnings growth (-6% to 12% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.11)

Given these factors, we believe Shop Apotheke Europe NV is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.